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Sources of Wage Inequality

Listed author(s):
  • Anders Akerman
  • Elhanan Helpman
  • Oleg Itskhoki
  • Marc-Andreas Muendler
  • Stephen Redding

Recent theories of firm heterogeneity emphasize between-firm wage differences as a new mechanism through which trade can affect wage inequality. Using linked employer-employee data for Sweden, we show that many of the stylized facts about wage inequality found in Helpman et al. (2012) for Brazil also hold for Sweden. Much of overall wage inequality arises within sector-occupations and for workers with similar observable characteristics. One notable difference is a smaller contribution from between-firm differences in wages in Sweden, which could reflect the influence of Swedish labor market institutions in dampening the scope for variation in wages between firms through collective wage agreements.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.103.3.214
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File URL: http://www.aeaweb.org/aer/ds/may2013/P2013_4401_ds.zip
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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 103 (2013)
Issue (Month): 3 (May)
Pages: 214-219

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Handle: RePEc:aea:aecrev:v:103:y:2013:i:3:p:214-19
Note: DOI: 10.1257/aer.103.3.214
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  1. Elhanan Helpman & Oleg Itskhoki & Marc-Andreas Muendler & Stephen J. Redding, 0. "Trade and Inequality: From Theory to Estimation," Review of Economic Studies, Oxford University Press, vol. 84(1), pages 357-405.
  2. Hartmut Egger & Udo Kreickemeier, 2009. "Firm Heterogeneity And The Labor Market Effects Of Trade Liberalization," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(1), pages 187-216, 02.
  3. Carl Davidson & Steven J. Matusz, 2010. "International Trade with Equilibrium Unemployment," Economics Books, Princeton University Press, edition 1, number 9075, June.
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